Shares of TJX Companies (NYSE:TJX) were slipping today alongside a broader sell-off in retail stocks and the market in general. The retail slide comes as tomorrow marks the peak of retail earnings season, with TJX reporting in the morning, and with Black Friday and the start of the holiday shopping season about to kick off.
The sell-off in the T.J. Maxx/Marshall's parent along with other retailers seems to signal investor pessimism heading into those key events. Consequently, TJX stock closed the day down 4.9%.
Though there was no specific news out on TJX today, the stock may have also been reacting to the slide in retail stocks last week as companies like Macy's, Nordstrom, and Walmart all reported earnings. Despite strong results, those stocks all traded lower post-earnings, a sign that the run-up in retail stocks earlier this year may have peaked.
With its off-price model, TJX is in a stronger position than many of its peers as it continues to open new stores and is less threatened by e-commerce, but the stock is nonetheless subject to broader market sentiments about the sector as shares are more expensive than those of most of its peers, at a P/E of 21.
The off-price champ should turn in a solid earnings report tomorrow given the strong consumer environment and impressive numbers from its peers. Analysts see revenue increasing 8.3% to $9.49 billion, and earnings per share rising from $0.50 to $0.61. Comparable sales jumped 6% in the second-quarter report, a sign that its model is continuing to resonate with consumers, but given the sector sell-off over the last few days, the company may have to beat those estimates by a sizable margin in order for the stock to move higher tomorrow.